[FORUM]Which is the real people’s party?

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[FORUM]Which is the real people’s party?

With its entry into the National Assembly, the Democratic Labor Party is trying to revise various public welfare laws. The party is showing particular interest in revising certain economy-related laws that the Grand National Party and the Millennium Democratic Party had been accused of cutting corners in passing.
The laws that the Grand National Party and the Millennium Democratic Party had passed were supposedly to stabilize the livelihood of low-income citizens, but in reality there are many unregulated elements that are threatening the livelihood of low-income people. Which is the real people’s party? The Democratic Labor Party’s main strategy in the National Assembly seems to be flying the banners of a party that wants to protect the interests of low-income groups.
The Democratic Labor Party is urging the revision of a law on protecting the tenants of leased commercial buildings that has caused controversy since its enactment two years ago. Since the law was enacted according to the demands of small-scale shop owners and civic groups, building owners have tried to protect their interests by raising lump sum deposits or monthly rentals abruptly ― before the law’s implementation. Some building owners have even raised their rent beyond the upper limit of legal protection in order to avoid the law.
As a result of the law, small-scale shop owners were protected in some aspects but left vulnerable in others. Until now, the Grand National and the Millennium Democratic Parties had largely been avoiding dealing with the sufferings of the small-scale shop owners who incurred serious losses when large commercial buildings went bankrupt one after another after the 1997-98 financial crisis. They were afraid of having to take responsibility.
In 1990, the National Assembly revised the law on protecting the tenants of residential buildings, expanding the rent term from one year to two. This only led to the doubling of the average lump sum deposits required for lease. Needless to say, the lives of the low-income families without houses of their own were made more difficult. Eleven years later, in 2001, the Assembly once again revised the law with the intention of protecting tenants.
We have experienced many trials and errors through the legislative actions of our Assembly. We have often witnessed laws that were enacted for the benefit of the voters and low-income groups become distorted in the market and hurt the pubic welfare instead. It is our tragedy that we have almost never learned from our lessons.
The Assembly must take into full account the potentially negative side effects of the welfare measures that low-income groups demand and the various economy-related laws that civic groups advocate. The legislators need to have the sincerity to study different aspects of the market economy that we are living in. The economist Ronald Coase, who received the 1991 Nobel Prize in Economics, gave this warning: Politicians must consider the possibility that measures to protect the economically weak could in fact harm the weak. For example, the economist pointed out, legislators should be aware of the flow of the market in which the higher the reparation costs for a wrong diagnosis, the fewer medical benefits the poor are able to get.
The controversy over making public the details of building costs of apartments seems ready to move into the new National Assembly. The measures that the government and opposition parties have produced are diverse. Of course, people are angry about the excessive profiteering of the construction firms.
But if we force the construction firms to make the details of building costs public, government regulations to ensure the objectivity of the prime cost and to control the sales prices would breed invisible corruption.
The quality of the apartments would fall and the consumers will be sure to complain. The excessive profiteering of the construction firms could be regulated in other ways. The government’s plan to float the sales price of the apartments would only incur great costs. It would take a long time for market mechanisms to be experienced here.
It would be nice if the parties do not sell themselves in the name of the people randomly, and if they do not produce half-baked policies under such slogans as “livelihood party,” “welfare party” and “economy party.”
If they point out the problems and produce plans only based on the false images of the market, they would incur irrevocable responsibilities. And the results will be carried on to the next election.

* The writer is a senior editorial writer of the JoongAng Ilbo.


by Choi Chul-joo
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